Semi-State Pensions: Discussion

I welcome our witnesses, Ms Mairéad de Buitléir, Mr. Colm Ó Gógáin and Mr. Matt Kelly. Before inviting the witnesses to make their presentation, I will read a note relating to privilege. Members will have a number of questions after the presentations.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. If colleagues have mobile phones they should turn them off or to flight mode. Apart from interfering with the proceedings of the meeting, they interfere with its recording and transmission. I understand Ms de Buitléir is to start but witnesses can present in any order they wish before we go to colleagues for questions.

Ms Mairéad de Buitléir

I am representing the RTÉ retired staff association but I am standing in for our chairperson, Mr. Tony O'Connor, who sends his apologies. I express our sincere gratitude to this Oireachtas committee for taking the time and having the interest to meet us today. We are a group of retired staff associations from a number of semi-State organisations. We are people who devoted our entire working lives providing infrastructural services for the State. We represent a great number of people who provided these services for the benefit of this country. However, although we are a large group of retirees, semi-State pensioners do not have any recognised mechanism or organisation to deal with concerns and grievances with former employers. We are really locked out of all the machinery of this State. A retired semi-State pensioner is set adrift once he or she walks out that door. The Pensions Authority does not deal with complaints from pensioner organisations and neither does the Pensions Ombudsman, industrial relations nor the trustees from our pension funds. Legal remedies are cost-prohibitive for pensioners. As it currently stands, semi-State pensioners have no avenue for representation or access to arbitration. This must now be corrected in order to seek a voice for our members at the negotiating table and the facility for arbitration.

It is not commonly understood that most semi-State or State organisation pensioners do not qualify for old age pensions or any of the benefits associated with it, including dental, optical or aural benefits. There are a few exceptions. Those of us who were in RTÉ do not benefit from any of these. We were not allowed to pay a full PRSI stamp. There is a myth out there that RTÉ pensioners have gold-plated pensions but the reality is that a fifth of our pensioners are on an income of €12,000 yearly. We have not received any pension increase since 2005. In the same period, contributory old age recipients have had their pensions increased from €179 to €248, an increase of 38.5%. They also received a double payment in the Christmas period of 2017 and another double payment due this coming Christmas 2018. In the same period, our pension decreased by 2.5% because of the Government levy, and that will be imposed on us for the rest of our lives. The consumer price index has seen an increase of 14% since 2005, so we have endured a loss value in our money of 16.5% since 2005.

Earlier this year RTÉ’s pension scheme actuary had provided for a 2.25% increase following actuarial valuation, solvency and providing for the minimum funding standards. Despite these hurdles being met we have not received €1 of an increase. Our association has made a number of representations on behalf of our members to RTÉ but we have heard nothing back. Clarity is required as to who is ultimately responsible for public sector pension schemes. Is it the companies or the State? There are variations in each of these schemes in how they are governed and in how much oversight is involved by the Departments. In our case the Department of Finance and the Department of Communications, Climate Action and Environment is involved. We need absolute guarantees that our concerns will be addressed in the forthcoming amendments to the pensions legislation. Looking forward to the future, our members must have the resources to feed, clothe, stay warm and to be able to meet their health needs as they progress through their older years.

Mr. Colm Ó Gógáin

I am a pensioner representing the Bord na Móna retirement association. In the general scheme of the Social Welfare and Pensions Bill 2017, published on 9 May 2017, head 12 related to minimum notice for ceasing contributions and head 13 related to determination of schedule of contributions. This provided for some but not sufficient protection for pensioners from employer sponsors of defined benefit pension schemes who intend to cease contributions to the schemes. Head 12, under provision No. 5, referred to funding proposals.

It proposes that the sponsoring employer continues to pay the contributory rate as per the terms of the funding proposal during the 12 month period.

Under head 13 (2), it also states that the amount determined by the board in subsection (1) shall be deemed to be a debt due from the employer concerned to the trustees of the scheme and may be so recovered by the trustees in any court of competent jurisdiction.

The Social Welfare, Pensions and Civil Registration Bill 2017, as published on 6 July 2017 had none of the above. In fact, heads 12 and 13 were excluded. Instead it had only two amendments to Part 3 of the Pensions Act 1990 concerning timing.

I wish to bring to the committee's attention some facts in relation to the semi-State companies defined benefit pension schemes. Firstly, pension scheme membership was compulsory and a condition of employment. In looking at my own documentation, my job offer letter from Bord na Móna on 19 August 1974, states that the board had in operation a general employees superannuation and widows and orphans pension scheme, membership of which is compulsory. I want to put that on the record.

The next item is that the scheme trustees are appointed by the company board which also has the right to approve trustees nominated by members, and in some cases members have a right to nominate trustees. Furthermore, company board approvals are required for trustee decisions, for example, pension increases, as mentioned by Ms de Buitléir, appointment of investment managers and investment strategies. Finally, the shareholder through its company board has significant influence and control on defined benefit schemes and this must be aligned with its responsibility and accountability to those schemes.

Under clause (5) and the provisions of head 12 in the draft head, as published in May 2017, and the reference to funding proposals, the draft Bill proposes that the company-sponsoring employer "continue paying the contribution rate as per the terms of the funding proposal during the 12 month period". This, in line with company responsibility and accountability to the scheme, which I referred to earlier, must also reflect the requirement to make good the sponsoring employer’s remaining balance of the funding proposal and that this becomes a debt on the sponsoring employer. The ranking order of this debt should be reflective of when the debt was incurred, that is, the date of the agreement on the funding proposal.

The rationale for this is that in all schemes, and especially in schemes where both sponsoring employer and scheme members both contribute to fund deficit resolution via a funding proposal, the scheme member share is fully committed and provided for as scheme liability is immediately reduced via the implementation of pension payment reductions whereas the sponsoring employer's contribution is made on a phased basis of up to ten years, as may be set out in the terms of the funding proposal.

In summary, the sponsoring employer sets out the rules and controls of a defined benefit scheme via the trust deed. It has total control of that. We ask the committee to ensure that this power is aligned with the sponsoring employer’s responsibility and accountability to the scheme. A 12 month notice period of cessation of funding proposal contributions is not reflective of that responsibility nor accountability. Go raibh maith agat.

Mr. Matt Kelly

I wish to address the committee on the minimum funding standard, MFS, and its effect on the pension freeze in the case of many semi-State companies, including ESB pensioners, who have had a pension freeze for ten years. There is a triple lock on pension increases to be considered. In some cases, as well as the triple lock, any proposed increase is subject to employer approval as well. These locks are: scheme solvency; minimum funding standard; and actuarial opinion and assumptions. This has resulted in semi-State company pensions having a freeze on pensions for a ten year period, which is a very significant portion of a pensioner’s remaining lifetime, while being denied any compensation for cumulative consumer price index increases over the period. What affects pensioners is the consumer pensioner price increase, which would be even greater. We do not buy Ferraris.

Scheme solvency has been impacted by the pension levy which has resulted in semi-State pensioners burdened with a levy on their pensions for life and should the pensioner pre-decease a spouse, the levy would also apply to the spouse’s reduced pension, half-pension, of what the pensioner had for the spouse's lifetime.

The minimum funding standard as applied in Ireland needs greater flexibility in reserve calculations and on quoted costs of annuities which can overstate the costs of annuity purchase. This has been stated by the Minister but we are waiting for her to effect any amendments to the Bill going through the Dáil at the moment. In fact, I am amazed the Bill, as it currently stands, has only two items on pensions and they are timing items. There is absolutely nothing else in the general scheme. I cannot understand why that has happened. The ability of the State to apply levies by means of stamp duties or similar charges to pension funds, which we should remember are the private property of the scheme members, is legal but morally indefensible. It would not encourage those who may be auto-enrolled in future proposed State-employer-employee schemes to remain in them if the funds are liable to be levied in times of financial stress.

Provision in actuarial assumptions for annual percentage increases in pensions which are known will not to be paid create even further liability on pension funds and push the funds further into apparent deficit. Semi-State workers employed before 1995 in many State organisations differ from other employees in that a condition of employment was obligatory membership of the company pension scheme and exclusion from qualification for a State contributory pension. It is implicit that the first tier benefits available to State contributory pensions are included in semi-State employee and pensioner benefits. The pension freeze has ignored the fact that since it started in 2008, an approximate 9% increase in State contributory pensions took place during the pension freeze period.

When I joined ESB there was a pension promise, which was that pensions would reflect the salary of the job the person left. This pension promise, implicit in the State pension schemes, has not been honoured during the last ten years and we ask that the committee work to give legal effect to the pension promise and to vindicate the legitimate expectations of pensioners.

All of the above factors have impacted to the detriment of semi-State pensioners and need to be addressed in amendments to the Bill. The omissions mentioned in the general scheme are of great concern to pensioners as is the fact semi-State companies and employer organisations have lobbied to have certain provisions of the general scheme removed or not included in the Bill.

In summary, the Minister said proposed amendments were intended to be introduced on Committee Stage to allow an employer to walk away after a 12 month notification period with a possible funding obligation by the employer to be determined by the Pensions Authority. This would be insufficient to provide adequate protection for pensioners, because an employer could walk away after 12 months and abandon the pension scheme. We urge the committee to make efforts to have these protections included in the Bill.

I will summarise the three contributions in seven points. First, legislation is necessary to enable representation and arbitration for pensioners. As Msde Buitléir said, our groups have been trying to engage with everyone and we have nowhere left to go. Representation is no good without arbitration. Second, a definition is needed to identify what body should have the ultimate responsibility for funding deficits in public sector companies. Third, flexibility in the minimum funding standards must be provided to avoid overstatement of liabilities in the pension funds which result in the pension freeze. Fourth, the extension of employer debt should include a balance of funding proposals beyond a walk-away period of 12 months. Fifth, legal effect must be given to the pension promise to meet the legitimate expectations of pensioners. Sixth, it is necessary to have a constitutional prohibition on the imposition of levies or similar charges on pension funds legitimately set up under the legislation for the pension auto-enrolment proposal. Tomorrow, we will hold a constitutional referendum on blasphemy, an issue that does not affect many people. Pension legislation affects hundreds of thousands of pensioners of semi-State companies. I do not know what has happened to the proposal to amend the Constitution. Perhaps Deputy O'Dea can comment on that. Finally, pensioner representative organisations must be included in consultations to identify funding standard reform options and provide balance and equity.

One of the big problems we face is that organisations and State agencies will agree to speak only to individual pensioners. Individual pensioners do not have the ability to represent the entire body of pensioners. It is vital that organisations representing pensioners are allowed to engage in representations. Pensioners are facing IBEC and semi-State corporations and, as such, we cannot be represented by individuals.

Mr. Matt Kelly

Mr. Kelly noted that the Bill was published in May 2017. Members will recall that the heads of the Bill were available prior to publication and the joint committee dealt with them in pre-legislative scrutiny. We were as surprised as the witnesses to note that certain sections that we had discussed in pre-legislative scrutiny did not appear in the Bill when it was published. When I spoke in the Dáil in July 2017, just before the summer recess, the Minister stated clearly that substantial amendments would be introduced on Committee Stage. The committee has written to the Minister on a number of occasions pointing out that we are still waiting for amendments to appear more than a year after the pre-legislative scrutiny. We had anticipated, perhaps wrongly, that the select committee would deal with Committee Stage of the Bill in late 2017. We have corresponded with the Minister urging that the amendments to the Bill be dealt with because she has not introduced amendments. Members are familiar with the issue.

On a general point, while we work collaboratively as a committee, it is up to individual members and their political parties to bring forward amendments on Committee Stage.

I apologise for my voice, which is slightly affected by a flu. I thank the witnesses for attending and for their excellent presentations. My views on the minimum funding standard, the solvency of pension funds and how pensions are calculated are fairly well known. The current provisions in this regard are insane and bear no relationship to reality.

As the Chairman will be aware, I had an amendment to previous legislation passed by the Dáil requiring the Pensions Authority to produce a number of models for the Oireachtas to consider. However, as the legislation has been parked and currently resides somewhere in the Bermuda Triangle, we do not know what the position is in that regard. We will continue to press for the introduction of legislation, however. The accountancy type rules are irrelevant and have resulted, as the witnesses correctly noted, in many defined benefit pension schemes being declared insolvent when they were not insolvent.

The major issue is access and lack of representation. I do not know how many pensioners of semi-State companies there are but I expect the figure is considerable. At this stage in 2018, it is beyond bizarre that such a large group has no avenue through which to make a complaint. Members of private pension schemes have access to the Pensions Ombudsman and various organs, whereas pensioners of semi-State companies have no such access. We must address this in the forthcoming legislation, if we ever get to see it. The Minister has been promising to bring it back to the House for more than 14 months and we will push for it to come before us. We will debate a social welfare Bill that will reflect changes introduced in the budget. I do not see any reason to further delay this legislation, which has lain in abeyance for so long.

As the Chairman pointed out, the heads of a Bill were discussed by the committee. They included certain protections, which in my view were not adequate. When the Bill was published, however, these provisions had disappeared, although the Minister promised to introduce substantial amendments to reflect the earlier heads. We are still waiting to see these amendments. The initial proposals were based to some extent on a Private Members' Bill I introduced to provide substantial protections for people in defined benefit pension schemes. These protections would not have brought the pensions industry to its knees or caused the sky to fall in because they were modelled largely on what had been done in the United Kingdom for defined benefit pension schemes. They were not, therefore, extraordinarily radical. They were, however, a significant step forward when compared with what we have now, namely, virtually nothing.

It is self-defeating nonsense to propose a charge on the assets of the company because of non-payment of pension provisions for a 12 month period. It would not achieve anything and could have unintended consequences that would have the opposite effect of what was intended in the first place. That point was discussed during the debate.

It is extraordinary that despite the representative groups of the semi-State sector having no access to bodies such as the Pensions Ombudsman, decisions by actuaries and trustees that members of certain funds were entitled to a pensions increase have not been implemented. Companies and employers have been able to ignore these decisions. I am familiar, for example, with the position in CIÉ, whose pensioners are not represented today. Under an agreement reached in 1994, two pensions schemes that were heavily in deficit were amalgamated with a scheme that was not in deficit.

As a quid pro quo, the company undertook to pay pension increases to retired staff as salaries increased, but that has not been honoured despite the fact that the actuary recommended it in some cases. I see now that even though the trustees of RTÉ have recommended a 2.5% pension increase, that is not being paid. That strikes me as a bit ironic given what I remember from being involved in a current affairs programme in RTÉ at the time of the controversy concerning Independent Newspapers. I met a large number of journalists, producers and programme managers out there who were bursting with indignation at the carry-on of Independent Newspapers, yet here we have RTÉ refusing to pay retired staff a pension increase of 2.5% as recommended by its own trustees. There is a great deal of hypocrisy in this country of which this is just another example.

We put forward legislation to prevent future Governments of whatever persuasion from imposing levies. As the witnesses correctly pointed out, the fact that a levy can still be imposed is a deterrent and will certainly slow down the auto-enrolment process when it comes in as people will be tempted to opt out. Many people will probably opt out if a levy is imposed at some stage. There were some genuine constitutional difficulties with that and we have committed to resubmit the legislation. I hope we will be able to get all of those things done while the current Dáil is still in existence. We are committed to that. The immediate issue is amendments to the forthcoming legislation to protect people like the witnesses and those in defined benefit pension schemes generally. That legislation has been due here for the past 14 months. We will get ahead with drafting some of those amendments. I thank the witnesses for their suggestions which will help us in the work we are doing in that regard. They can rest assured that we will have the appropriate amendments drafted if there is anything else they want us to include or if they have concrete suggestions apart from what they say here. They should, by all means, send them on to us. We have done our work and are simply waiting for the Minister to republish the legislation so that we can give effect to it.

I thank everyone who presented. This is an issue, as the Chairman has said, on which the committee has been pressing. We have raised the matter in private session and corresponded on it consistently over the past two years. I proposed amendments to the Social Welfare Bill in December 2016. These were not on the semi-State companies but on defined benefit schemes and one of the newspaper chains. We were assured at the time that speedy action would be taken. That is what we were promised and it is what we facilitated by moving our schedule as a committee in early 2017. We examined the heads of the Bill, which has gone into complete abeyance since. There are many valid concerns and serious questions need to be asked regarding any future auto-enrolment scheme also. I have concerns about a constitutional provision in respect of levies. There may, honestly, be issues in that regard. However, I strongly support the other matters.

It is important to note regarding employees such as the witnesses that the question of representation is a fundamental one. It is key. This is part of a relationship they have had. It was a collective relationship and the measures secured and required were the result of collective action. It is part of an ongoing relationship. I worked with Older & Bolder for many years and I believe fundamentally in the right of people to continue to organise and speak and represent themselves collectively. That is fundamental in relationships with organisations and companies. Certainly, a divide and conquer approach to individuals who must fight and take cases alone is not acceptable.

There is a particular question for semi-State bodies here. As pointed out very eloquently by the witnesses, this is not a matter in which people had a choice in many cases. It is not a provision which was there as an option for persons. It is one thing I would be cautious of when talking about auto-enrolment schemes and so forth. They are supplementary pension schemes but what was offered by semi-State companies is the core pension of employees. It is the fundamental basis for the witnesses to live the rest of their lives. In many cases, albeit not all, the option to engage with the contributory State pension was not available. When we have had presentations from the Department, it has been very clear on the different purposes of the contributory State pension which is, for example, aimed at ensuring an adequacy of income. It is a core standard. The supplementary pension is intended then to increase the level of replacement income. The idea is that the witnesses are entitled to fundamental security. This is not a speculative pension. It is not additional or supplementary. This is their security and they were required to pay into it. There should be a clear message, as I think it was put in the heads of the Bill, that this is a debt. It is something which is owed and there is a duty and responsibility in respect of its delivery. We need to be very clear. I am worried not only that there seems to be a slipping away but that there is an idea that we can have this debt but it will disappear after 12 months or we will walk away. Frankly, that is completely unacceptable. This is the core and foundational contract of employment. It is a contract made by the State via its bodies. That is fundamental and it can be fought tooth and nail.

As well as the idea that a responsibility cannot be evaded, there is a question of risk. I am very concerned by the correspondence we have received about the national broadcaster looking at a contract for advisers to look at mitigating risks. The risks to be mitigated do not include the risk that former employees may have inadequate replacement income or income to cover the fundamentals they need to plan the rest of their lives and to live well. The risks considered appear to be risks to the organisation, namely, regulatory, operational, legislative or legal risks. It is very clear and important. This was a big debate when we came to supplementary income. It was about where risk sat and whether it would be placed on the individual. Where does the risk sit and where does the guarantee sit? From my perspective, there must be a fundamental level in the proposed supplementary pension system whereby the risk sits with the State, which is proposing the scheme, or with the company if a pension company is contracted regarding a universal supplementary retirement savings scheme. One cannot have a situation where risk is spread out to the individuals given what we saw in 2008 when private pension schemes lost 38% of their value and individuals took the hit. That is fundamental. That is a fundamental argument on the supplementary scheme but it is much more serious for the witnesses because this is a core pension. This is first-tier pension whereas the supplementary pension is second-tier. I underscore that because we could get lost. I support the witnesses very much in that.

I would appreciate comments from the witnesses on their experience as persons paying into pensions of making choices at the time and what their expectations were. I ask about their plans, not as individuals, but for those they represent. What were the legitimate expectations? I imagine that very few of the witnesses were saying they hoped stocks would go up and that they would get a fabulous dividend. I think people went in with the idea that they were planning for the long term. I ask them to reflect on that. I ask the witnesses to elaborate on the concern that there is a very large tender contract of €500,000 going out on the mitigation of risks. Does anyone from RTÉ wish to comment on that? I thank the witnesses. I had one other point, but I have lost track of it in the discussion. I might get a chance to get back in later.

Before the witnesses respond, I have some brief questions. I am a new member but when I started on the committee I knew there was a pensions time bomb in Irish Life. Interestingly, Irish Life deals with defined benefit pension schemes for hundreds of other companies but its employees' defined benefit pension scheme was being taken from them. The one comment we could have made to them was that there was a mechanism in the heads of a Bill that might offer them some protection but, as others have said, the mechanism was removed. It is a serious challenge. I appreciate the witnesses appearing before the committee but I have a couple of questions about the collective nature of the way they are representing themselves. Three semi-State organisations are represented here but do they represent others as well?

Ms Mairéad de Buitléir

We do. We have been meeting for the past number of months. Those of us who were in RTÉ started to look at the whole situation. We knew our pensions were decreasing. We were not getting the same value in our pensions and there was a good deal of concern about that. We contacted like-minded people in other pension organisations who were in the same position as ourselves. Former staff of ESB, Bord na Móna, Bord Gáis, CIÉ, Eircom, airline staff and ourselves are represented.

Ms Mairéad de Buitléir

No. From what we understand, certain semi-State or State organisations were allowed both pensions. They were allowed to pay their A and D stamps. However, in RTÉ, we were prohibited from paying any stamp. I believe the same applies to ESB and a number of other organisations. Also, the staff did not have any of the auxiliary benefits of the A stamp.

Ms Mairéad de Buitléir

A number of points jump out from the witnesses' presentations, such as that one fifth of the pensioners are on €12,000 a year. The statistics are startling and indicate a level of income poverty that-----

Ms Mairéad de Buitléir

People do not realise that. As I said in my presentation, there is a myth in that regard, particularly in terms of RTÉ because people read headlines in the newspapers about the huge salaries and benefits. However, 80% or 90% of the ordinary workforce going into that organisation every day, be they technical, clerical or whatever staff - I worked in the programme area - are on very moderate salaries. We are not on gold-plated pensions. They are anything but that. It is true that one fifth of our pensioners are on pensions as low as €12,000.

Mr. Matt Kelly

On the gold-plated pensions, that is not true. They were brass-plated pensions but we have not had a brass farthing for ten years. The Retired Aviation Staff Association, RASA, is associated with us also. In 2014, just before the cuts, their average pension was approximately €16,000. After cuts, the average pension is €14,000. In the case of ESB, the average pension is €26,000. We must remember that all these averages are averages in terms of those above and those below, and those below are suffering hardship. They are finding it difficult to live. They are having to cut their private medical insurance. They are really struggling at this stage because their pensions are not even matching the first tier safety net about which Senator Higgins spoke. It is a very serious problem for semi-State pensioners, and the State is not showing any appreciation of the 40 years we have spent working to provide the infrastructure for the State.

If I could make one last comment, somebody said there has been lobbying on behalf of the companies and the employers' organisation. That is written all over this. I do not like to separate myself from the witnesses but the pensioners need to start lobbying harder and making their voices heard because these statistics and facts are stark. I echo what Deputy O'Dea said at the end of his contribution. If the witnesses have any concrete suggestions in terms of amendments and so on, please send them to us. We would be very happy to push their case.

I refer to the people who were prohibited from getting that safety net below the first year. However, those who were on high incomes have the private pension tax relief and those schemes. That is where the very high earners in any organisation are very much being subsidised in terms of our private pension tax relief system, which we have discussed previously, whereas the guarantee most people want, which is to be able to pay into a guaranteed safety net, so to speak, is a way forward. It is interesting that, within that core, the very high earners will go one way and the others will go the other way.

My specific question relates to Mr. Kelly's presentation, although others may wish to comment, in terms of when we come to grapple with this Bill when it comes back to us. I refer to the triple lock system that represents a block in terms of increases. What specific measures are required in that regard? Is it to push for transparency in the way that is exercised? Is it about ensuring that employer approval is removed completely from that process? In terms of the scheme solvency, minimum funding standard and actuarial opinion and assumptions, there are many hoops to jump through before an increase is given. Should removing that extra hoop of employer approval be the first move we should make? Is it to do with transparency? How can we navigate those three hoops to ensure it is not functioning as an effective block, which is the case now?

Mr. Matt Kelly

What this committee can do most effectively is tackle the minimum funding standard. The minimum funding standard is there to be amended in the Bill currently before the Dáil. As Teachta O'Dea stated, the minimum funding standard affects the liabilities of pension schemes. The liabilities of pension schemes are used as blocks.

On the other point about actuarial opinion, we would see actuarial opinion where assumptions are made on facts. Assumptions are made when we do not know what is going to happen but when assumptions are made in the full knowledge that there is a pension freeze in place for at least ten years, that puts an extra liability of approximately €700 million on the ESB pension fund, which is the one I am familiar with. Actuarial opinion decided last year that those of us in the ESB scheme will live longer than everybody else in the country and thereby lumped a huge liability of an extra hundreds of millions of euro into the pension fund. It has been reduced this year, although I do not know the reason. Perhaps it is because we have highlighted the problem.

We believe employers have too big an influence on allegedly independent boards of trustees.

The people appointed to boards of trustees by employers are generally highly placed individuals in the companies. Whereas the trustees are very assiduous in not revealing information to the members we do not know how much information goes back to the employers. This is something the committee might look at in the context of the IORP II directive that must be in law in the State by 13 January. I do not know whether it is proposed to implement the directive via the pensions Bill or from where it will come. I have not seen it mentioned anywhere. Again, the State will be in breach of an EU directive if it is not in legislation by mid-January.

I will afford everyone an opportunity to speak but I want to make some general comments. From the committee's point of view, the presentations made by the witnesses were certainly eye-opening. Most of us were unaware of the lower-end pensions referred to, whereby people from semi-State bodies are on pensions that are less than the State pension. Ms de Buitléir indicated people are on pensions that are 20% less than €12,000. That was an eye-opener. Mr. Kelly gave us averages on others. This type of information has been very useful to the committee because it is not something of which we would generally be aware.

The committee is also concerned about the lack of access and information and the difficulty with this. As the witnesses indicated, people can go the legal route if they have very deep pockets but it is not a route that most people can access. The presentations have been very helpful and informative.

Deputy O'Dea referred to the minimum funding standard in quite a level of detail and colleagues have indicated from their own point of view that on Committee Stage of the Bill they would be prepared to table and make amendments. That is the way legislation works. It is worth noting that the more consensus there is the greater the opportunity for amendments to be successful so that is quite important.

On the final page of Mr. Kelly's submission he set out seven issues. From our point of view it would be useful to understand the Government's response to these issues and we will communicate with the Minister directly. We will keep the witnesses informed. I do not suggest she will be supportive or otherwise but the Minister's position on these points would be worth having. When we get the responses we will correspond with the witnesses to keep them in the picture.

Mr. Matt Kelly

Mr. Colm Ó Gógáin

Ms Mairéad de Buitléir

I know that some of our members are really struggling and if there is an illness or an extra issue they just do not have the money. It has been frustrating for us because we cannot talk to the trustees and, as we have said, we have been completely locked out of all the other machinery of the State. We have had no avenue to negotiate or to get representation or arbitration and that is crucial for us at this stage. We need to be able to talk to people and this is a very important point.

Mr. Matt Kelly

To follow up on what Ms de Buitléir has said, I will give a list of where we have been and where we had no representation or were refused representation. The Equality Tribunal will deal with equality only and it will only deal with pensioners for a 12 month period after they have left employment. We would much rather be regarded as former employees than as pensioners. The Ombudsman will only deal with individuals, and I have already made the point that individuals need their organisations to represent them. Industrial relations procedures provide protection for current workers and trade unions only and the people involved will not listen to us. The Pensions Authority will not listen to pensioners' organisations. Legal remedies, as has been mentioned, are absolutely cost prohibitive because any time we tackle the corporate State companies they throw every legal weapon available at us. It is an unequal fight. We do not have the resources to legally challenge the companies. I go back again to the minimum funding standard, which is torpedoing our pension funds and any hope we have of an increase in whatever time is left to us.

The fundamental question of representation is one we definitely need to pursue because it is vital. The witnesses have represented their colleagues and former colleagues so very well today and they should be afforded the opportunity in every other forum.

Mr. Colm Ó Gógáin

With regard to the minimum funding standard that Mr. Kelly just mentioned, Senator Higgins spoke about derisking in RTÉ. If we derisk and move to equities the risk reserve is reduced, which means that liabilities are reduced, but we all know that equities are returning very little at present and, as such, people have not had a pension increase in ten years. If it keeps going the way it is there will never be a pension increase and this is a huge concern. This is why the minimum funding standard review must be called into question quickly.

Ms Mairéad de Buitléir

I will refer to a statement written by RTÉ to the Government, which stated increasing employer risk is likely to lead to unintended consequences for pension schemes because employers, in assessing the risk, may be less likely to exercise discretion where they have it, such as in the case of discretionary pension increases, and may also consider means of curtailing the risk. We know what they are thinking. They feel they have all the discretionary means to curtail any increases due to people who paid into a pension. This is a deferred salary for us. We all paid into this pension fund. It was a private fund into which we paid so they are our assets.

I thank the witnesses for their attendance and presentations to the committee. As I have indicated, we will stay in correspondence. The committee is anxious that the Bill comes back before us. I specifically stated I will get the Minister's response to the seven points made by Mr. Kelly. The witnesses have heard from my colleagues on the committee who are prepared to bring forward various amendments on Committee Stage of the Bill. I thank the witnesses for their attendance and we will be in contact over the coming weeks as we get the replies. If anything further emerges from the point of view of the witnesses on drafting amendments I ask them to feel free to stay in contact with the committee.

The joint committee adjourned at 11.30 a.m. until 10 a.m. on Thursday, 8 November 2018.

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